A recent Harvard Business Review article reminds us that the world is aging, and that matters for economic growth. In the past, an abundant and growing labor pool was a powerful engine of the world economy; today, the number of workers is starting to decline in many countries (and I would add counties). This leaves no alternative but for companies, individuals, and governments to work in smarter ways. In an era of profound demographic change, another productivity revolution is a necessity. Technology will be a big piece of the productivity growth equation and advanced technologies like 3D and 4D printing will play larger roles. The question is how does this impact jobs and their availability, especially for the less skilled workforce. The answer is these jobs will be eliminated.
The article goes on to say that without an acceleration in productivity growth, the rate of global GDP growth is set to decline by 40% from 3.6% a year between 1964 and 2012 to only 2.1% over the next 50 years. This would be very detrimental to all sectors of the economy, including manufacturing and the services. Healthcare services in particular needs to make greater productivity strides. It would take 80% faster productivity growth to fully compensate for the projected decline. Is it feasible for the global economy to achieve such a large acceleration in productivity growth from an already rapid rate? New research we conducted at the McKinsey Global Institute found that while this is a very tall order, it could be do-able.
I’m looking for local area (county level) data on industry and worker productivity. I haven’t found anything out there so far, but will keep looking. It would be interesting to see how Ashtabula County stacks up in terms of productivity.